Almost all (90%) e-cigarette products sold globally are made in China, where there are almost 1,000 manufacturers.1 There are over 500 e-cigarette sellers marketing products under varied brand names,1 and it is estimated that 30–50% of sales of global e-cigarettes are conducted online.2 An estimated 35 million people were regular dual or sole users of e-cigarettes and vapour products (including heated tobacco products) in 2015.3 In 2016, the market for e-cigarettes globally was estimated to be worth 7.1 billion US dollars, and is predicted to continue its rapid growth over the coming years to reach 44.55 billion by 2024.4 The US is consistently the market leader, and in 2015 was followed by the UK and other countries in Western Europe.3, 5

18B.1.1 Product development

Although the concept of an electronic cigarette was first patented in the USA in 1965,6 it was not until 2003 that the first commercialised e-cigarette product was developed in China.7 E-cigarettes generally comprise four parts: the battery, the heating element, the vapourising chamber, and the solution cartridge. The battery supplies the power to the heating element, in order for it to become sufficiently warm to aerosolise the solution. The heating element is housed in a chamber, which also holds the aerosol until the user inhales. Some types of e-cigarettes allow users to control the voltage so they can select the amount of aerosol produced and nicotine concentration.8

There are a growing number of varieties of e-cigarettes and solutions, with evidence of large variability between the labelled content and the actual content and concentrations.9 Differences in battery voltage and unit circuitry can create significant variances in the products’ ability to aerosolise the solution, and consequently the amount of nicotine and other constituents delivered to the user. Individual user behaviour, such as the length, depth, and frequency of puffs might also affect nicotine absorption. Users can also modify many of the products, allowing them to alter delivery of nicotine and/or other drugs.10 First-generation, disposable ‘cig-a-likes’ (which resemble tobacco cigarettes) have increasingly been displaced by later-generation refillable tank systems and e-liquids, which deliver higher doses of nicotine.5

18B.1.2 Start-up companies

Historically, the e-cigarette market was highly fragmented and largely dominated by small start-up companies.11 More recently, large manufacturers and transnational tobacco companies have come to dominate the market (see section 18B.1.3). NJOY—a company independent of the tobacco industry—was the unrivalled market leader in 2012, but had filed for bankruptcy by the end of 2016. A number of other independent e-cigarette companies continue to operate, but comprise only a small share of the global market.1 Some have suggested that the introduction of increasingly stringent regulations, such as in the US and EU, may force the closure of such independent companies, which may not have the means to meet regulatory approval costs5(see Section 18B.1.4).

18B.1.3 Major international companies

In response to declining smoking prevalence, transnational tobacco companies have increasingly diversified their product lines to include ‘reduced harm’ alternative nicotine products. Some have questioned the ethics and motives of such diversification, with tobacco companies profiting from smokers, new nicotine users, and would-be quitters12.

Although initially slow to enter the market, the major international tobacco companies have invested heavily in e-cigarettes in recent years, and tobacco companies now own all of the top e-cigarette brands.5 Acquisitions and investments by the tobacco industry in the past few years include the following:

British American Tobacco (BAT) acquired CN Creative in 2012, a start-up that developed the ‘Vype’ e-cigarette. BAT went on to launch Vype in the UK in 2013, and in France, Germany, Italy, Poland and Colombia in 2015. In 2015, BAT acquired the e-cigarette brands Ten Motives in the UK and CHIC in Poland.11 In 2017, BAT acquired Reynolds American for $49 billion, and reportedly expressed particular interest in the company's next generation products, including its best-selling US e-cigarette brand, Vuse.12

Lorillard, the third-largest cigarette manufacturer in the US, acquired the e-cigarette company blu eCigs for a reported $135 million in 2012. It also acquired Skycig, a leading brand of e-cigarettes in Britain, for $48.5 million, allowing it to enter the UK market. Skycig then became blu eCigs in May 2014, with the support of a £20 million marketing campaign. When RJ Reynolds acquired Lorillard in 2014, Imperial Tobacco purchased its blu line to avoid antitrust concerns that RJ Reynolds owning both Vuse and blu would give it an unfair advantage in the market.11

Japan Tobacco International (JTI) acquired UK e-cigarette brand E-lites in June 2014 from previous owner Zandera. JTI also invested in the start-up Ploom in 2011, and agreed to commercialise its vapourisers outside the USA. In February 2015, JTI acquired the patents and trademarks from Ploom Inc., allowing it to develop new products and markets.11

Fontem Ventures (a subsidiary of Imperial Tobacco) acquired Dragonite in August 2013, which was previously owned by the Chinese pharmacist who invented the modern e-cigarette. In early 2014, Imperial presented its own e-cigarette called Puritane. Imperial also purchased the blu e-cigs line as part of the merger between Reynolds and Lorillard in 2014. In February 2015, Imperial announced the launch of its new e-cigarette, Jai, in France and Italy.11

Philip Morris International (PMI) announced in December 2013 that it was joining with Altria to market e-cigarettes and other ‘reduced risk’ tobacco products. PMI gained the right to exclusively sell Altria's e-cigarettes outside the US. In 2014, PMI acquired UK-based Nicocigs, the owner of the Nicolites brand, claiming that it would provide immediate entry to the UK market for these and any other e-cigarette products.11

Altria, which owns Philip Morris USA and controls about one half of all cartons sold in America, launched its e-cigarette ‘MarkTen’ in 2013. In 2014, Altria also acquired the e-cigarette manufacturer Green Smoke.11

Source: Tobacco Control Research Group, Tobacco industry investment in non-cigarette products. TobaccoTactics.org, University of Bath. Last updated 9 September 2014.

18B.1.4 Lobbying for favourable regulation

The introduction of increasingly strict regulations on e-cigarettes, such as in the US and EU, led to fierce lobbying, both in favour of and against proposed new laws. Smaller e-cigarette companies have tended to fight new restrictions, while big tobacco companies have pushed for a range of controls on e-cigarettes, including detailed health warnings, reduced product ranges, restricted sales, and onerous and costly testing requirements. The tobacco companies argue that these restrictions ensure product safety, but others have suggested that the industry’s support for the laws comes from a desire to maintain dominance and minimise competition. Strict regulations might give large companies an advantage in the e-cigarette market, as they are much more likely than small start-up companies to have the resources to go through potentially lengthy and expensive approval processes.13,14 For example, the FDA’s process to gain approval for a new product is time-consuming and expensive, potentially favouring the tobacco industry’s products.15,16

Similarly, several commentators have claimed that the initial move to classify e-cigarettes as medicinal products under early drafts of the EU Tobacco Products Directive (since changed, see 18B.9) was influenced by lobbyists from both the pharmaceutical and tobacco industries.17 GlaxoSmithKline, one of the major providers of pharmaceutical smoking cessation aids and thus a competitor of e-cigarettes, lobbied vigorously for stringent e-cigarette regulation in the EU.18 Johnson & Johnson, which markets the Nicorette line of products, expressed strong support for regulating all non-tobacco nicotine products, including e-cigarettes, as medicines.19 Tobacco and e-cigarette lobbyists reportedly sent gifts and offers of hospitality to members of the European Parliament. While the extent to which these were accepted is not known, all member states are signatory to article 5.3 of the World Health Organization’s Framework Convention on Tobacco Control, which obliges parties to protect the processes of development and implementation of tobacco control policies from interference by the tobacco industry and associated interests.17

Relevant news and research

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